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New Internet Bubble in Corporate Valuations?

Google CEO, Eric Schmidt said in an interview with a Swiss magazine Bilanz: "There are clear signs of a bubble ... But valuations are what they are. People believe that these companies will achieve huge sales in the future."

In 2010 , Facebook overtook Google Inc to become the most visited website in the United States, according to online analytics firm Experian Hitwise. The company is generating profits at a faster-than-expected rate, according to a document distributed by Goldman Sachs last month. Facebook is among several fast-growing privately held Web companies, including Twitter, Zynga and Groupon, that investors have been anxious to buy into ahead of potential public listings.

But liquidity on private exchanges has been low and since Facebook so far has not been forced to publicly report its earnings there is little transparency for investors. Facebook, whose online service counts more than a half a billion users worldwide, is expected to possibly go public around 2012.